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Abstract In order to address power and energy demands of mobile electronics and electric cars, Li‐ion technology is urgently being optimized by using alternative materials. This article presents a review of our recent progress dedicated to the anode and cathode materials that have the potential to fulfil the crucial factors of cost, safety, lifetime, durability, power density, and energy density. Nanostructured inorganic compounds have been extensively investigated. Size effects revealed in the storage of lithium through micropores (hard carbon spheres), alloys (Si, SnSb), and conversion reactions (Cr 2 O 3 , MnO) are studied. The formation of nano/micro core–shell, dispersed composite, and surface pinning structures can improve their cycling performance. Surface coating on LiCoO 2 and LiMn 2 O 4 was found to be an effective way to enhance their thermal and chemical stability and the mechanisms are discussed. Theoretical simulations and experiments on LiFePO 4 reveal that alkali metal ions and nitrogen doping into the LiFePO 4 lattice are possible approaches to increase its electronic conductivity and does not block transport of lithium ion along the 1D channel.